New Heritage Doll Company: Business Overview Essay

2190 Words May 2nd, 2013 9 Pages
Index

Executive summery………………………………………………………………………………………….…1

Introduction……………………………………………………………………………………………………….2

Case analysis Match My Doll Clothing……………………………..……………………….……….….………….2 Design Your Own Doll………………………………………………………………………………..3
Comparison……….…………………………………………………………………………..….………4

Additional Questions………………….………………………………………………………………………5

Recommendations……………………………………………………………………………………………..5

Appendix Appendix 1: calculation formulas, definitions and assumptions……………….6 Appendix 2: Exhibit 1 & 2………………………………………………………………………….9 Appendix 3: The NPV Profile…………………………………………………………………...11

Executive Summary

The production division at New Heritage Doll Company is considering between two
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However, we do believe that for the sake of comparison this projection should be kept.
Another concern that arises from the unexpectedness of children’s fashion trends is that the company may be faced with a very limited time frame in which it can make profitable investment decisions.
One of the opportunities that arise with the current proposal is the reduction in the seasonality of the company’s sales and earnings. The new line created an additional benefit of supplying clothing all year round, which in turn could provide the firm with a more stable revenue stream. By taking advantage of the “off peak discount” offered by some suppliers and manufacturers, the line manager expected to reduce the company’s seasonality which would create a more stable revenue stream for the firm.
A threat which attributed to this proposal is its reliance on supposed discounts offered by suppliers and manufacturers. The failure of obtaining these discounts can cause an increase in costs, resulting in lower profitability.
Capital expenditures in 2010 are predicted to be high since the project is during its first year of operation . In the following year they are still relatively high, but this can still be explained by it still being the beginning years of operation. 2012-2013 have the lowest Capital expenditure of all projected years; this

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